Please, do not pay too much attention to what you read in national newspapers or see on TV. The national average is NOT what happens right here in your Saint Petersburg Florida neighborhood. Every city will recover at a different speed. There are a lot of factors to consider, just to name a few.
If you saw a lot of new construction in Saint Petersburg or wherever your are between 2002 and 2006, we might have an “over supply”.
If you do not see a lot of new jobs in your area, we have an “under demand”
Both is the case in Saint Petersburg Tampabay, if you combine these two, you have a real estate inventory problem. The law of supply and demand is out of balance.
Next point, we are a tourist destination and people buy condos or homes as a vacation property. If people do not have the money to buy anything, our inventory will not go down in the rate we would like to see, but it gets worst, vacation homes are like toys, when people have less money or need more money, what do they sell first? The car they need to go to work or their toys? So that ads to the already huge inventory of homes and condos for sale here in Saint Petersburg. For a lot of people, the baby boomers were the answer to our real estate mess here in Saint Petersburg. A lot of baby boomers have a huge house somewhere up north and will sell it to move to Florida when they retire. Well, think again, in a few years, that statement is true again but right now, the boomers have lost a lot of money in their 401K’s and the stock market. They might have to wait an extra 4 or 5 years before they can retire and they have to sell their home up north first (which is not easy right now)
All this said (and I could add a lot more) here is the biggest reason why our property values will not JUMP back up over night. Let’s assume they are already at the bottom, so now if someone buys a condo for $200,000 in a subdivision, let’s say Seminole Isle or Shores of Long Bayou, he has just set the price for this type of condo in this complex. I mentioned Shores of Long Bayou and Seminole Isle because these are huge subdivisions and the more inventory you have the better it can be compared by an appraiser. I could have named complexes like the Yacht and Tennis club in Saint Pete Beach or Beachway in Seminole, or Silver Sands in Saint Pete beach or all the water front complexes in Madeira beach, it does not really matter, it does not change the fact.
So, $200,000 was the price on Jan, 1st the unit next door will not sell for 220,000 on Feb 1st because the buyer most likely needs a loan and the bank will not give him more that the appraised value. Yes, if that unit has golden faucets, it might sell for more, but how many times have you seen golden faucets? The property appraiser goes by the units sold in this particular neighborhood. If supply and demand were balanced or like 4 or 5 years ago, the demand was higher than the supply, we would have a different picture, but for now, here in Saint Petersburg and the beaches
Supply of condos and homes for sale is at an all time high.
Demand for homes or condos is very low.
Banks are not eager to lend.
People are still scared and cautious.
Sum it all up and you will see that the values CAN NOT jump up within a year or two.
That was the bad news, the good news is the interest rates went down down down, all of people that have an Arm can now afford their payment again and do not need to sell which will bring down the supply or at least not add to it. Low interest rates are motivating to buyers who were on “the fence” the last few years, this will reduce the inventory. We have not seen any new construction over the last 2 years, which also helps getting the property inventory down. Once the real estate inventory is balanced again, we are back to normal and the cycle of appreciation can start.
So, that was a very long answer, to make it short, if you thing about selling your home or condo, do not loose time, list your property right now, waiting a year or two will cost you money.
How do I price my home or condo for sale?
Should I wait another year, so I can sell for more?
And on it goes. These are questions I get very often.
Keep one thing in mind, Real Estate is local !!!
The Saint Petersburg Tampa Bay area is not like the rest of the US.
Call us 727 409 8706 or send us an e mail if you have any questions,want to list your property or need the lastest update on "When will the real estate market come back" See what buyers and Sellers have to say about the Realtor Anne Hensel
PS. I wrote this post about "when will the real estate market come back" about 7 month ago. I am not going to change it because most of it is till very true for the Saint Petersburg Tampabay area. BUT here is an update as of Sep. 2009. Over the last few months we have seen an increase in real estate sales activities. Great deals like bank owned properties and short sales are flying of the shelf. Nearly 50% of all the buyers pay cash (unheard of). Prices are still going down but buyers are seeing a great opportunity to buy real estate here in St. Petersburg Tampabay.
If you want read some of my monthly newsletters you can follow the real estate trends here in Pinellas County.
Newsletter for Saint Petersburg Tamapabay real estate August 2009
Newsletter for St. Petersburg Tampabay real estate July 2009
Newsletter for Saint Petersburg Tampabay real estate June 2009
Newsletter Saint Petersburg tamapabay real estate March 2009
Newsletter for Saint Petersburg Tampabay real estate December 2008 |
